David Rodnitzky Interview, PPC Associates (1 of 2)

Interviews here on PPC Ian have been incredibly popular. I’ve been so fortunate to have secured interviews with top industry leaders. Today, I could not be more thrilled and honored, I have secured an exclusive interview with David Rodnitzky, founder and CEO of PPC Associates. PPC Associates is Silicon Valley’s SEM Agency. Just check out their billboards in Palo Alto and see for yourself. I’m a huge fan of David and his agency. They have grown quickly and have an amazing reputation because they deliver results and know their stuff (you may wish to check out their 7 Habits eBook). Without further ado, let’s jump into today’s interview! Today I’ll post the first half of this great interview and tomorrow the second half!

How did you get started in the SEM industry?

I graduated from law school in 1999 and all I knew was that I didn’t want to be a lawyer. So I moved to San Francisco from Iowa because I wanted to live on the West Coast. Initially I took whatever job I could find, from helping QA a Barbie videogame, to doing legal research for a law firm, to consulting to the financial industry.

After about six months, I got an offer to work for a startup called Rentals.com as a "manager of strategy," whatever that means. About six months into that job, the Director of Marketing quit and there was no one in the company managing the marketing budget. So I just volunteered to do it, even though I knew nothing about marketing, and the company agreed to let me take a stab at it.

Initially I was working with an ad agency and a PR agency and paying each of them a retainer of $30,000/month (I did not negotiate these contracts!). Then one day I heard about a company called GoTo.com where you could buy advertising for a penny per click. I tried it out and I was shocked at the volume and quality of traffic I was getting. I fired the two agencies and shifted as much of our budget as possible to GoTo as I could. GoTo turned into Overture, which then turned into Yahoo Search Marketing, which was of course copied by Google AdWords. I was lucky to stumble into this stuff when it was all very new.

How did you decide to start your own agency?

In 2007 I was working for an etailer and managing a remote team in Bangalore, India. About once a quarter, I was making the 30-hour trip over to India to coordinate with my team. Toward the end of the year, my wife got pregnant with our first son, and traveling overseas suddenly seemed like a very bad idea. Plus, I had been working for startups for more than seven years at that point, and I was just burnt out. So I quit without any plan other than to spend time with my wife and new son.

For the first few months of 2008, I hung out at a coffee shop playing online poker and dabbling in affiliate marketing. Slowly, however, I started to get calls from friends in the industry asking me if I could help them with their SEM campaigns. The call volume kept increasing to the point that I stopped the poker and affiliate marketing (neither of which were making me particularly rich) and I focused full-time on the consulting.
From there, I eventually brought on a partner (Will Lin) to handle additional work, and we eventually started to hire staff, rent offices, build process and technology – and, as they say, the rest is history. Today we have 35+ team members, two offices, almost 60 clients, and we manage somewhere north of $60 million in online marketing spending.

What’s it like running an SEM agency?

It’s a lot of fun. We work with a lot of entrepreneur-driven companies, and it’s really exciting to be a part of taking a company from an idea to a successful business. I’m not the kind of person who can come up with a great startup idea and actually execute against it, so I enjoy living vicariously through our clients!
Of course, there is also a lot of stress running an SEM agency. We have to constantly stay on top of the latest trends in SEM, and more and more we are being asked by clients to manage their Facebook, display, mobile, YouTube, and LinkedIn campaigns. So we are constantly distilling new information and applying this to clients’ accounts. It can make your brain hurt, but I’d much prefer to be at a job where I come home mentally exhausted than numb from boredom.

What sets PPC Associates ahead of the competition? What makes you guys unique?

There are a few things we do differently from other agencies. First, we invented the concept of the two-day contract. We want clients to work with us because they are overjoyed by the results and service they are getting, not because they are locked into a long-term contract. So every client has the right to fire us at any time with just two days’ notice if we aren’t exceeding expectations. Fortunately, most don’t!

We also provide our clients with free landing page and banner ad design – this is also a concept that we’ve pioneered in the industry. We’re huge believers in conversion-rate optimization, and we’ve put our money where our mouth is by hiring a full-time designer to support our clients. A lot of clients don’t have internal resources for design, so this is a huge value-add for them.

Third, we have a pretty unique internal process for optimizing campaigns. We call it the Alpha-Beta process, and you can understand the foundations of it by downloading the whitepaper available on our home page. Alpha-Beta is a very granular process that creates incredibly targeted ad groups, each based on a specific query in exact match. We basically make it impossible for Google or any other search engine to match our clients on bad-performing queries.

And last but not least, we are obsessed (in a good way) with service. We run a Net Promoter Survey ® every quarter to make sure we are absolutely delighting our clients, and we make process and personnel changes continuously to improve our results. Our last survey yielded a 91% Net Promoter score, which is about as good as you can get, but we are always trying to get better.

What are some of the greatest challenges you face?

The biggest challenge I see is keeping up with the pace of online marketing. It’s hard enough to keep track of all of the AdWords betas and improvements coming out, but when you combine that with changes to Facebook’s ad platform, the rapid pace of innovation in the display media buying world, and everything else we touch, it’s a lot of information to absorb. Our solution – which has worked so far – is to hire channel-specific experts to be the internal "gurus" for our clients.

What are some of the greatest rewards of running PPC Associates?

The biggest reward for me is helping others to be successful and getting paid to do it. I love seeing our clients gain market share and get accolades from the press. I also love that we’re now employing more than 35 people in a tough economy. Happy clients and happy team members are about all I can ask for.

Stay Tuned – Part 2 of The Interview Comes Out Tomorrow

David, thank you so much! What an amazing interview. I’m totally glued to this one, and am so impressed. I can’t wait to post part 2 of the interview tomorrow. PPC Ian readers, make sure to check out PPC Associates today.

Interesting interview! Running an SEM agency seems to be very lucrative but hard work! The 2 day contract seems really cool though, helps people test them out without being stuck with any services they dont want/need anymore!

Great interview, Ian – and David, very interesting story. I love hear about how people got started, and I can definitely relate to both the dabbling in internet poker (something I did in college) as well as affiliate marketing (something I’m doing now).

Of course, I’m nowhere near as successful as you are, so this was definitely an inspiring read. Thanks!

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[…] is Silicon Valley’s SEM Agency. Before reading this post, I encourage you to first read Part 1 of my David Rodnitzky Interview. Part 1 of the interview is totally awesome and is not to be missed. Without further ado, […]

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About PPC Ian

Hi, I'm Ian Lopuch, also known as PPC Ian. I'm a Silicon Valley business executive, marketing executive, and general manager, with deep roots in technology. I’m also an investor with a lifelong obsession for cash flow. Whether I’m acquiring and developing commercial real estate properties, leading complex digital marketing programs with $30 MM+ annual budgets, integrating cutting-edge technologies, or hiring and coaching large teams, I take charge of all with the mindset of an investor.